Lab-grown diamonds are only growing in popularity, and are not going anywhere any time soon.
Here Lucas Smith, digital specialist at Heart in Diamond, takes an in-depth look at how two of the industry’s giants are approaching the lab-grown diamond question and what that could mean for the future of diamond jewellery.
The first examples of diamonds being worn as jewellery dates back to around the 11th century, when kings and queens showed off the glittering gemstones in crowns.
For hundreds of years, regal headdresses were the only places diamonds were used as glamorous accessories, up until 1477, when the first diamond engagement ring was given.
Since then, diamonds have featured prominently in all kinds of jewellery available to the masses. As times change and society’s interests head in a different direction, a new type of precious gemstone is emerging: the lab-grown diamond.
Synthetic diamonds aren’t anything new. The first ones were created in 1954 and mostly used for industrial-grade tools in a sector in which their affordability and durability were major advantages.
For around 60 years, jewellers all over the world largely shunned this kind of lab-grown gemstone. They were firm in their beliefs that it was an inferior fringe product, even though technology was improving and becoming more sophisticated each decade.
Today, industry-leading jewellers are having a change of heart and becoming more open to the idea of diamonds grown in laboratory conditions.
Other companies, such as Heart In Diamond, are taking a slightly different approach and making lab-grown diamonds from the ashes of deceased loved ones and pets.
The synthetic gemstone market has even attracted large-scale investors from Silicon Valley and Hollywood. Leonardo DiCaprio, the star of the film Blood Diamond has been helping promote lab-grown diamonds as an ethical and low-carbon alternative to the natural gemstone.
At this time, lab-grown diamonds only account for approximately 2% of the overall diamond jewellery market. But as demand for affordable and sustainable gemstones increases in the millennial and Gen Z market, this figure is anticipated to rise over the next few years.
Here’s a look at how two major players in the jewellery industry are approaching synthetic diamonds and the reasons behind their choices.
After vowing to never sell lab-grown diamonds, De Beers shocked the industry in May 2019 when it began doing just that. In that month, a 1 carat synthetic diamond cost around £3,030, with the equivalent mined gem costing around £4,330. Just four months later, De Beers began selling 1 carat man-made diamonds for £580.
Industry experts believe that the biggest risk in De Beers producing lab-grown diamonds is that it could undermine the value of natural diamonds. However, others argue that by getting involved in the man-made gemstone industry, De Beers has actually strengthened the market by showing confidence in a product some consumers were unsure of.
While the original De Beers site emphasises grandeur and sophistication with phrases such as “Nature’s rarest works of art” and “The gift of timeless elegance”, Lightbox takes a more light-hearted approach. De Beers’ lab-grown diamonds are marketed as sparkly pink, blue and white fashion accessories, far from the precious real gems they scientifically are.
De Beers confirms that the disparity is intended to create a clear distinction between the pieces made with mined diamonds and the pieces made with lab-grown diamonds. Through smart marketing, the company aims to reinforce the mystique of stones formed by the Earth so consumers continue to purchase them for special occasions, such as engagements and weddings.
This is most likely due to the significant imbalance in profit between mined and lab-grown diamonds. According to analyst Paul Zimnisky, natural diamonds are more than 50% more profitable than their man-made counterparts.
forced to lower the price of their lab-grown diamond jewellery accordingly. To maintain healthy profits, the industry giant will naturally strive to continue selling more mined diamonds than lab-grown ones.
Some diamond specialists believe the industry leader has made an unsafe move by breaking into the lab-grown diamond industry. Martin Roscheisen, Chief Executive of Diamond Foundry, said his company didn’t see the new jewellery range as competition and had not had to cut their prices,
“It’s a very high-risk gamble that De Beers is taking that so far we don’t see working out, because they have primarily legitimized the man-made category.”
For years Pandora has specialised in offering its clients affordable luxury jewellery. Although the company is best known for its bracelets and collectible charms, Pandora also sells a range of jewellery featuring mined diamonds. However, sales figures are fairly low, with just 50,000 diamond jewellery sales out of a total of 85 million being made in 2020.
In 2021, Pandora launched its first ever lab-grown diamond campaign in the UK, with plans to go worldwide by 2022.
Instead of targeting the engagement and bridal market, the primary focus for many diamond sellers, Pandora is marketing its rings, bracelets and necklaces featuring synthetic diamonds for women to buy as a gift for themselves.
Many industry experts consider this to be an irregular move, considering the current consumer market. Millennials and Gen Z are the primary purchasers of diamonds for engagement rings and studies show that almost 70% of millennials are considering purchasing a lab-grown diamond instead of the mined alternative.
Taking this into account, it’s easy to see why many people would think Pandora has missed out on a lucrative market. However, Alexander Lacik, the CEO of Pandora, explained his shrewd approach in an interview with Bloomberg.
“We don’t want to denigrate the value the industry has built up around diamonds—the whole flair around diamonds. We definitely want to keep that.”
Although the lab-grown diamonds used in Pandora’s new jewellery range cost around ⅓ of the price of mined diamonds and are made using renewable energy and carbon offsets, Lasik doesn’t want to angle them as an alternative to natural diamonds, therefore destroying the value so many have worked hard to establish.
All diamonds are here to stay
Millennials and Gen Z are drawn to lab-grown diamonds because of their low price, transparency and sustainability. Demand for this type of environmentally-friendly and affordable gemstone is set to maintain its 15-20% annual increase, resulting in a market of between 10 million and 17 million carats by 2030, according to a report commissioned by the Antwerp World Diamond Centre (AWDC).
But just because the synthetic diamond sector is expected to grow doesn’t mean jewellers have to turn their backs on traditional diamonds. Many companies are finding a profitable balance in providing both mined and synthetic diamonds, reaching a broader customer base while staying true to their roots
Sidney Neuhaus, co-founder of Kimaï, the company that made Meghan Markle’s famous lab-grown diamond earrings, told the BBC that as long as diamonds hold their emotional resonance, consumers will continue to shop for both lab-grown and mined diamonds.
It’s not about the price or rarity. It’s about the emotional value of the gemstone and the memories it holds.
Words by Lucas Smith, Heart in Diamond digital specialist.